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Tungsten West PLC (TUN)

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Tuesday 21 December, 2021

Tungsten West PLC

Half Year Results

RNS Number : 2591W
Tungsten West PLC
21 December 2021
 

21 December 2021

 

Tungsten West Plc

 

("Tungsten West", the "Company" or the "Group")

Half Year Results for the six months ended 30 September 2021

Tungsten West, the owner and operator of the Hemerdon Mine in South West England, is pleased to announce its half-yearly results for the six months ended 30 September 2021.

 

First half and recent highlights include:

 

· Admission onto London Stock Exchange, AIM Market including the completion of a successful equity fundraise of £39 million

· Agreement of terms for the Royalty and Senior Loan Facility with Orion, securing a further £36 million in project financing

· Funds raised place the Company in a strong financial position to bring Hemerdon back into production

· The Company made a loss before tax of £4,990,226, which is in line with expectations for the stage of the project

· Workforce has been scaled up to prepare for operational readiness

·   Commencement of the sales of aggregate material from stockpiles left by the previous operator. Aggregates sales anticipated to steadily grow, providing cash flow in the run up to the restart of the mine

· Further strengthening of the Board prior to admission including the addition of Finance Director, Nigel Widdowson

· Completion of the Front End Engineering Design (FEED), with detailed design underway

· Distribution agreement signed with GRS Roadstone, a UK leading construction materials company, for the sale of aggregates from Hemerdon

 

Chief Executive OFFICERS Statement

 

The first half of the financial year was one in which the Group continued to prepare for recommencement of mining operations, with significant progress made on designing the re-build of the processing plant, strengthening the management team, finalising the AIM admission process and agreeing terms with Orion Resource Partners ("Orion") for arranging project finance from a Royalty and Senior Loan Facility. Following the successful fundraise on admission to AIM in October 2021, Tungsten West is in a strong financial position, and is looking ahead to a landmark 2022.

 

1.  Review of activities

 

The Company's primary objective for the first half of the financial year was to prepare to raise the necessary funding for the processing plant-rebuild and recommencement of mining operations at Hemerdon. In October 2021, the Company completed a successful admission to the AIM market of the London Stock Exchange, issuing equity to raise £39 million before expenses, and agreed terms for the Royalty and Senior Loan Facility with Orion, securing a further approximately £36 million in project financing.

 

Concurrent with the fundraising process, the Tungsten West team also progressed towards achieving a number of project milestones key to restarting production. Tungsten West published an NI 43-101 Bankable Feasibility Study in March 2021, which formed the basis of the redevelopment plan at Hemerdon. Since publication, the Company has successfully completed Front End Engineering Design (FEED) and has commenced the design and build phase.

 

 

 

Fairport Engineering Limited has been appointed to perform interim design works on early construction packs to advance the project before construction activities commence on site.

 

The Tungsten West maintenance team undertook a comprehensive review to understand and address the issues historically experienced by the former operator of the Hemerdon Mine. The areas where issues were identified have been redesigned and will be enhanced during the re-build programme, in order to not only rectify the issues faced by the previous operators, but to improve significantly the overall operations and reduce downtime.

 

The Mining Services Contract with Hargreaves Services PLC is in place, thereby securing an experienced mining contractor with significant prior experience of the project, as well as acting as specialist crushing subcontractors for the next ten years of mining operations.

 

The Company entered into offtake agreements with Wolfram Bergbaau und Hutten AG and Global Tungsten and Powders Corp for purchasing a minimum of 78% of forecast tungsten production. An offtake agreement was entered into with AfriMet Resources to purchase the tin concentrate to be produced. During the reporting period, the Company sold LIMS waste product (low grade tungsten concentrate) left on site by the former operator, realising £67,870 of revenue.

 

As announced on 15 December 2021, the Aggregates Division has commissioned a Terex® Agg Wash 60 plant to maintain production on a temporary basis whilst the main plant installation is undertaken. The Company has been shipping aggregates since January 2021, utilizing existing stockpiles that the previous operator had deemed as waste. Current estimates show there is sufficient existing stockpiles of material to meet the Aggregates Division forecast sales until the planned recommencement of  operations.

 

Sales of aggregates commenced during the reporting period, with £133,016 of revenue being recognised. The Company has signed a distribution agreement with GRS Roadstone, a UK leading construction materials provider, to off-take the aggregates produced during the future mining operations.

 

At 30 September 2021, the Group employed 47 staff (25 employees as at 30 September 2020). Following admission to AIM, the Company has been scaling up its workforce to enable it to deliver the plant re-build project, and progress towards operational readiness.  In this vein, a number of construction and engineering sector specialists have been recruited, including a select proportion who have previous experience of the Hemerdon project.

 

2.  CORPORATE

 

During April 2021, the Company arranged an equity financing of £3.7 million through the issue of new shares to existing and new investors. The funding enabled the Company to progress planning and designs for the ore sorters and rebuild of the front end of the process plant, initiate the refurbishment and redesign of the existing plant and hire key management and financial and administrative personnel.

 

The Company completed a successful admission to the AIM market of the London Stock Exchange in October 2021, issuing 65,000,000 new ordinary shares of £0.01 each ("Ordinary Shares") at 60p per share, raising new funds of £39 million. Fees incurred on the AIM admission process were, in aggregate, £3.1 million, resulting in net proceeds of £35.9 million.

 

In October 2021, the Company also secured a US$28 million Senior Secured Loan Facility and a US$21 million Royalty sale, with Orion Resource Partners. Amounts drawn down under these facilities will be used to fund capital expenditure and working capital requirements during the plant re-build and commissioning.

 

As part of the AIM admission process, in October 2021, the 8% Convertible Loan taken out to acquire the project, comprising £10.0 million of principle and £0.7 million accrued interest, was converted at 30p per share into 35,935,200 Ordinary Shares.

 

There were a number of Board changes during the period as the Group strengthened its executive and non-executive management in advance of the Company's AIM admission.

 

In July 2021, Nigel Widdowson was appointed to the Board as Finance Director.

 

Robert Ashley was appointed Chairman of the Board in September 2021. At the same time, Grace Stevens was appointed to the Board and Chair of the Audit Committee. David Cather was appointed to the Board and Chair of the Technical Committee and Chair of the Remuneration Committee.

 

Stephen Fabian stepped down from the Board in September 2021. The Board would like to thank him for all his hard work in the foundation of the Company and its formative years.

 

 

3.  Results

 

The Group made a half-yearly loss after taxation of £4,990,226 (2020: £3,631,500).

 

4.  outlook

 

Tungsten markets have remained steady throughout Q3 and Q4 2021 with the European Metal Bulletin Ammonium Para-Tungstate price being reported around US$320 per MTU (1 MTU = 10kg).  The near term outlook for prices will likely be driven by the ongoing COVID-19 situation and any potential new lockdowns being announced due to the Omicron strain affecting demand in Europe. Global inventories remain low, and future restocking of tungsten rich drilling equipment from the Oil and Gas industry on the back of higher energy prices seems likely. This should underpin long term tungsten demand and prices.

Tin prices have performed spectacularly well throughout 2021 and continue to hover around all-time highs at US$40,000 per tonne at the date of this statement. Recent news in the tin industry includes an announcement from the world's largest producing country, Indonesia, that they are looking to ban exports of ore and concentrates from 2024 in order to encourage investment in downstream industries. Ongoing political strife and terrorist activity in Myanmar also has the potential to restrict exports from the world's second largest exporter. Overall, the outlook in the short to medium term looks robust, but in the long term the Company expects a floor price closer to US$25,000 - US$30,000 per tonne to be likely.

Demand for aggregates continues to be strong driven by both regional and national construction and infrastructure projects in the UK. There continues to be a strong opportunity to substitute imported aggregates with domestic production from sites such as Hemerdon. Recent supply constraints have led to considerable price increase for the products and we envisage the current prices being maintained over the next 6 months and beyond.

 

As the project progresses towards placing orders the Company is experiencing some price inflation for materials components. Management is actively monitoring pricing and availability of materials, equipment and labour and will make adjustments to planned developments if material price increases are experienced or supply constraints lead to project delays.

 

After completing a successful admission to AIM and securing sufficient funds to complete the investment and working capital required to restart production at Hemerdon, the Group is well positioned for 2022.

 

Cautionary statement

This document contains certain forward-looking statements in respect of the financial condition, results, operations and business of the Group.  Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  There are a number of factors that could cause the actual results of developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.  Nothing in this document should be construed as a profit forecast.

 

 

 

 

 

Enquiries

 

Tungsten West

Max Denning

Tel: +44 (0) 203 178 7385

 

Strand Hanson

(Nominated Adviser and Financial Adviser)

James Spinney / James Dance

Tel: +44 (0) 207 409 3494

Camarco

(Financial PR)

Gordon Poole / Emily Hall

Tel: +44(0) 20 3757 4980

Email: [email protected]

Hannam & Partners

(Joint Broker)

Andrew Chubb / Nilesh Patel

Tel: +44 (0)20 7907 8500

 

VSA Capital

(Joint Broker)

Andrew Monk

Tel: +44 (0)20 3005 5000

 

Further information on Tungsten West Limited can be found at www.tungstenwest.com

 

 

Overview of Tungsten West

 

Tungsten West is the 100 per cent. owner and operator of the past producing Hemerdon tungsten and tin mine, located near Plymouth in southern Devon, England. The Hemerdon mine is currently the world's third largest tungsten resource, with a JORC (2012) compliant Mineral Resource Estimate of approximately 325Mt at 0.12 per cent. WO3. The Company acquired the mine out of a receivership process in 2019 after its most recent operators, Wolf Minerals, stopped production in 2018. While it was operator, Wolf invested over £170 million into the development of the site, the development of significant infrastructure and processing facilities. Hemerdon was producing tungsten and tin materials, under Wolf, between 2015 and 2018, before the Company entered administration and placed the mine into receivership due to a number of issues that have since been identified and rectified by Tungsten West.

 

 

 

Consolidated Income Statement

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

Six months to

 

Six months to

 

Year ended

 

Note

30 September 2021

 

30 September 2020

 

31 March

2021

 

 

£

 

£

 

£

Revenue

3

200,887

 

-

 

40,170

Cost of sales

 

(2,844,474)

 

(2,590,399)

 

(4,426,818)

Gross loss

 

(2,643,587)

 

(2,590,399)

 

(4,386,648)

Administrative expenses

 

(1,763,573)

 

(629,409)

 

(2,511,811)

Other operating income

 

-

 

-

 

3,612

Other gains/(losses)

 

198

 

-

 

(24,301)

Operating loss

4

(4,406,962)

 

(3,219,808)

 

(6,919,148)

Finance income

 

47,388

 

3,572

 

112,005

Finance costs

 

(630,652)

 

(415,264)

 

(1,174,640)

Net finance cost

 

(583,264)

 

(411,692)

 

(1,062,635)

Loss before tax

 

(4,990,226)

 

(3,631,500)

 

(7,981,783)

Income tax credit

 

-

 

-

 

-

Loss for the year

 

(4,990,226)

 

(3,631,500)

 

(7,981,783)

Profit/(loss) attributable to:

 

 

 

 

 

 

Owners of the Company

 

(4,990,226)

 

(3,631,500)

 

(7,981,783)

 

 

 

 

 

 

 

 

Unaudited

 

Unaudited

 

Unaudited

 

 

p

 

p

 

P

Basic and diluted loss per share

11

(0.066)

 

(0.048)

 

(0.105)

 

There were no items of other comprehensive income in either period presented.

 

 

Consolidated Statement of Financial Position

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

30 September

 

30 September

 

31 March

 

 

 

2021

 

2020

 

2021

 

 

Note

£

 

£

 

£

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

5

4,682,080

 

4,528,239

 

4,367,271

 

 

Right of use assets

6

1,564,581

 

1,601,561

 

1,611,788

 

Intangible assets

7

4,919,853

 

4,919,853

 

4,919,853

 

Deferred tax assets

 

1,070,658

 

1,073,634

 

1,067,978

 

Escrow funds receivable

8

10,105,858

 

9,946,324

 

10,058,470

 

 

 

22,343,030

 

22,069,611

 

22,025,360

 

 

Current assets

 

 

 

 

 

 

 

Trade and other receivables

 

1,315,178

 

46,366

 

544,297

 

Cash and cash equivalents

 

2,863,684

 

790,366

 

3,499,580

 

 

 

4,178,862

 

836,732

 

4,043,877

 

Total assets

 

26,521,892

 

22,906,343

 

26,069,237

 

Equity and liabilities

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

12

760,113

 

5,319

 

6,856

 

Share premium account

 

5,519,169

 

6,724,853

 

12,327,484

 

Share option reserve

 

123,728

 

4,897

 

67,840

 

Warrant reserve

 

841,318

 

61,000

 

754,586

 

Retained earnings

 

(6,403,342)

 

(7,062,833)

 

(11,413,116)

 

Equity attributable to the owners of the parent

 

840,986

 

(266,764)

 

1,743,650

 

 

Non-current liabilities

 

 

 

 

 

 

 

Loans and borrowings

10

12,210,825

 

11,426,692

 

11,728,780

 

Provisions

9

10,139,081

 

9,620,615

 

9,964,824

 

Deferred tax liabilities

 

1,070,658

 

1,073,634

 

1,067,978

 

 

 

23,420,564

 

22,120,941

 

22,761,582

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

2,188,133

 

1,016,722

 

1,487,721

 

Loans and borrowings

 

72,209

 

35,444

 

76,284

 

 

 

2,260,342

 

1,052,166

 

1,564,005

 

Total liabilities

 

25,680,906

 

23,173,107

 

24,325,587

 

Total equity and liabilities

 

26,521,892

 

22,906,343

 

26,069,237

 

 

 

Consolidated Statement of Cash Flows

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

30 September 2021

 

30 September 2020

 

31 March

2021

 

 

Note

£

 

£

 

£

 

Cash flows from operating activities

 

 

 

 

 

 

 

Loss for the year

 

(4,990,226)

 

(3,631,500)

 

(7,981,783)

 

Adjustments to cash flows from non-cash items

 

 

 

 

 

 

 

Depreciation and amortisation

5,6

92,352

 

68,698

 

170,506

 

Impairment of property plant and equipment

5

-

 

-

 

79,478

 

Finance income

 

(47,388)

 

-

 

(112,005)

 

Finance costs

 

630,652

 

415,264

 

1,174,640

 

Share based payment transactions

 

55,888

 

-

 

62,944

 

Warrant transaction

 

-

 

-

 

-

 

Income tax expense

 

-

 

-

 

-

 

 

 

(4,258,722)

 

(3,147,538)

 

(6,606,220)

 

Working capital adjustments

 

 

 

 

 

 

 

Increase in trade and other receivables

 

(770,882)

 

352,990

 

(147,786)

 

Increase/(decrease) in trade and other payables

 

721,988

 

288,134

 

759,352

 

Net cash flow from operating activitie s

 

(4,307,616)

 

(2,506,414)

 

(5,994,654)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Interest received

 

-

 

-

 

2,707

 

Acquisitions of property plant and equipment

 

(359,954)

 

(159,008)

 

(135,437)

 

Net cash flow from investing activitie s

 

(359,954)

 

(159,008)

 

(132,730)

 

Cash flows from financing activities

 

 

 

 

 

 

 

Interest paid

 

-

 

-

 

(66,591)

 

Proceeds from issue of ordinary shares, net of issue costs

 

4,031,674

 

733,909

 

7,031,663

 

Payment of lease liabilities

 

-

 

-

 

(59,987)

 

Net cash flows from financing activities

 

4,031,674

 

733,909

 

6,905,085

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

(635,896)

 

(1,931,513)

 

777,701

 

Opening cash and cash equivalents

 

3,499,580

 

2,721,879

 

2,721,879

 

Closing cash and cash equivalents c/f

 

2,863,684

 

790,366

 

3,499,580

 

Consolidated Statement of Changes in Equity

Audited

 

Share capital

Share

premium account

Share option reserve

Warrant reserve

Retained earnings

Total

 

 

£

£

£

£

£

£

At 1 April 2020

 

5,139

5,991,124

4,896

61,000

(3,431,333)

2,630,826

Loss for the year

 

-

-

-

-

(7,981,783)

(7,981,783)

Issue of shares

 

1,717

6,336,360

-

693,586

-

7,031,663

Share based payments

 

-

-

62,944

-

-

62,944

At 31 March 2021

 

6,856

12,327,484

67,840

754,586

(11,413,116)

1,743,650

 

 

 

 

 

 

 

 

 

Unaudited

 

Share capital

Share premium account

Share option reserve

Warrant reserve

Retained earnings

Total

 

 

 

£

£

£

£

£

£

 

At 1 April 2020

 

5,139

5,991,124

4,896

61,000

(3,431,333)

2,630,826

 

Loss for the period

 

-

-

-

-

(3,631,500)

(3,631,500)

 

Issue of shares

 

180

733,729

-

-

-

733,909

 

At 30 September 2020

 

5,319

6,724,853

4,896

61,000

(7,062,833)

(266,765)

 

Unaudited

 

Share capital

Share premium account

 

Share option reserve

 

Warrant reserve

 

Retained earnings

 

Total

 

 

 

£

£

£

£

£

£

 

At 1 April 2021

 

6,856

12,327,484

67,840

754,586

(11,413,116)

1,743,650

 

Loss for the period

 

-

-

-

-

(4,990,226)

(4,990,226)

 

Issue of shares

 

744

3,944,198

-

-

-

3,944,942

 

Bonus issue of shares

 

752,513

(752,513)

-

-

-

-

 

Cancellation of share

 

 

 

 

 

 

 

 

premium account

 

-

(10,000,000)

-

-

10,000,000

-

 

Share based payments

 

-

-

55,888

-

-

55,888

 

Warrant charge

 

-

-

-

86,732

-

86,732

 

At 30 September 2021

 

760,113

5,519,169

123,728

841,318

(6,403,342)

840,986

 

                                               

 

 

Notes to the interim accounts

 

1.  Basis of Preparation

The interim accounts have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted in the United Kingdom ("UK adopted IFRS") using the accounting policies that are expected to apply in the Company's next annual report.

The accounting policies applied are consistent with those disclosed in the Company's last statutory financial statements and the AIM admission document.

The interim accounts do not comprise the Company's statutory accounts. The information for the year ended 31 March 2021 is not the Company's statutory accounts. The Company's financial statements for that year have been filed with the registrar of companies and the auditor's report on those financial statements was unqualified and did not contain statements under s498(2) or s498(3) of the Companies Act 2006.

2.  Going concern

The interim accounts are prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

In addition to the cash reserves at 30 September 2021, net equity funding of £36 million was raised through the issue of new shares in the Company's admission to AIM on 21 October 2021.

The Company has also entered into agreement with Orion Resource Partners to sell a US$21 million Royalty and draw on a US$28 million senior loan facility. Current forecasts indicate that the Company has sufficient cash and additional facilities to enable it to fund the capital investment and working capital over the period of time before profitable commercial production levels are reached.

Accordingly, based on the forecasts they have prepared and taking into account the cash levels and funding agreement with Orion Resource Partners, the Directors believe that they have a reasonable expectation that the Company and the Group has adequate resources to continue in operational existence for the foreseeable future and they believe it is appropriate to apply the going concern basis of accounting in preparing these interim accounts.

 

3.  Revenue

Revenue by product comprised the following:

 

Unaudited

Unaudited

Unaudited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

2021

 

£

£

£

Tungsten

67,870

-

13,220

Aggregates

133,017

-

37,675

Other

-

-

  (10,725)

 

200,887

-

40,170

 

 

 

Notes to the interim accounts

 

4.  Operating loss

Operating loss is stated after the following:

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

2021

 

£

£

£

Depreciation of property, plant and equipment

45,145

24,810

82,729

Depreciation of right of use assets

47,207

43,888

87,777

Impairment of property, plant and equipment

-

-

79,478

Staff costs

1,297,387

472,693

1,831,050

 

 

 

 

5.  Property, plant and equipment

 

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

2021

 

£

£

£

Opening net book value

4,367,271

4,394,041

4,394,041

Additions

359,954

159,008

135,437

Disposals

-

-

-

Depreciation

(45,145)

(24,810)

(82,729)

Impairment

-

-

(79,478)

Closing net book value

4,682,080

4,528,239

4,367,271

 

Analysed as follows:

 

 

 

Assets under construction

358,805

-

-

Land and buildings

4,246,161

4,423,945

4,247,787

Furniture, fittings and equipment

1,085

17,554

32,773

Motor vehicles

5,135

8,740

6,577

Other property, plant and equipment

70,894

78,000

80,134

 

4,682,080

4,528,239

4,367,271

 

 

Notes to the interim accounts

 

6.  Right of use asset

 

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

 2021

 

£

£

£

Opening net book value

1,611,788

1,645,449

1,645,449

Additions

-

-

54,116

Depreciation

(47,207)

(43,888)

(87,777)

Closing net book value

1,564,581

1,601,561

1,611,788

 

 

 

 

 

7.  Intangible assets

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

 2021

 

£

£

£

Goodwill

1,075,520

1,075,520

1,075,520

Mining rights

3,844,333

3,844,333

3,844,333

Closing net book value

4,919,853

4,919,853

4,919,853

 

 

 

 

 

8.  Escrow funds

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

 2021

 

£

£

£

Carrying amount at end of period/year

10,105,858

9,946,324

10,058,470

 

 

 

 

The funds held in escrow with a third party will be released back to the Company on the cessation of mining once restoration works have been completed. The amounts have been discounted to present value over the expected useful life of the mine plus two years start up. The actual funds held in escrow at the period end were £13,201,921 (30 September 2020 - £ 13,200,601) (31 March 2021 £13,201,256).

 

 

Notes to the interim accounts

 

9.  Provisions

 

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

Restoration provision

30 September 2021

30 September 2020

31 March

 2021

 

£

£

£

Carrying amount brought forward

9,964,824

9,620,615

9,620,615

Movement in provisions

-

(3,293)

(3,293)

Unwinding of discount

174,257

3,293

347,502

Closing net book value

10,139,081

9,620,615

9,964,824

 

 

 

 

 

10.  Long term borrowings

Long term borrowings comprised:

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March

2021

 

£

£

£

Lease liabilities

1,430,265

1,506,692

1,416,940

Convertible debt

10,780,560

9,920,000

10,311,840

 

12,210,825

11,426,692

11,728,780

 

 

 

 

 

11.  Basic and diluted loss per share

 

Unaudited

Unaudited

Unaudited

 

 

Six months to

Six months to

Year ended

 

 

30 September 2021

30 September 2020

31 March

 2021

 

 

£

£

£

 

Loss for the year

(4,990,226)

(3,631,500)

(7,981,783)

 

 

 

 

 

 

 

Number

Number

Number

 

 

 

 

 

 

Weighted average number of ordinary shares in issue

75,974,318

75,781,528

75,821,595

 

 

 

 

Basic and diluted loss per share

(0.066p)

(0.048p)

(0.105p)

      

 

The calculation of the loss per share has been retrospectively restated for each period presented to reflect the bonus issue of shares and share consolidation which took place on 22 July 2021 (see note 12).

The diluted loss per share calculations exclude the effects of share options, warrants and convertible debt on the basis that such future potential share transactions are anti-dilutive. Were the Company's convertible debt to be converted a potential further 35,935,200 ordinary shares of £0.01 each would be issued. Information on share options and warrants is disclosed in note 7.

Shares issued subsequent to the end of the interim period are disclosed in note 8.
 

Notes to the interim accounts

 

12.  Share Capital

 

Unaudited

Unaudited

Audited

 

Six months

Six months

Year ended

 

30 September

30 September

31 March

 

2021

2020

2021

 

 

 

 

Number of shares allotted

Number

Number

Number

 

 

 

 

Ordinary Shares of £0.0001 each

-

5,319,000

68,560,000

 

 

 

 

Ordinary Shares of £0.01 each

76,011,371

-

-

 

 

 

 

Nominal value

£

£

£

 

 

 

 

Ordinary Shares of £0.0001 each

-

5,319

6,856

 

 

 

 

Ordinary Shares of £0.01 each

760,113

-

-

 

 

 

 

 

       

Share issues during the period

During the period ended 30 September 2021 the share capital of the company was restructured. The following share transactions took place:

· The Company issued 7,349,832 ordinary shares of £0.0001 each for considerations ranging from £0.45 per share to £0.60.

· On 22 July 2021 a bonus issue of shares from the share premium account created 7,525,125,729 ordinary shares of £0.0001 each.

· On 22 July 2021 a share capital consolidation took place whereby each one hundred ordinary shares of £0.0001 each were consolidated into one ordinary share of £0.01 each.

During the period ended 30 September 2020 the following share transactions took place:

· The Company issued 1,805,000 ordinary shares of £0.0001 each for considerations ranging from £0.10 per share to £0.25.

During the year ended 31 March 2021 the following share transactions took place:

· The Company issued 17,170,000 ordinary shares of £0.0001 each for considerations ranging from £0.10 per share to £0.45.

 

13.  Share premium account

On 22 July 2021, it was resolved by the Directors to cancel an amount of £10,000,000 standing credit to the share premium account. This capital reduction was performed by way of a statement of solvency by the Directors and occurred prior to the Company re-registering as a public company.

 

 

Notes to the interim accounts

 

14.  Share options and warrants

 

Founder share incentives

The founder shareholders have a right to receive shares at a nominal value once certain milestones are met.

The movements in the number of incentives during the year were as follows:

 

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March 2021

 

Number

Number

Number

Outstanding at beginning of period

6,930,000

5,139,000

5,139,000

Granted during the period

671,137

171,195

1,791,000

Effect of share consolidation

-

-

-

Exercised during the period

-

-

-

Lapsed during the period

-

-

-

Outstanding at end of period

7,601,137

5,310,195

6,930,000

 

The original incentive rights of the Founders were terminated on admission to AIM and were replaced with options.

 

Share Options - Key Employees

The movement on the number of share options and warrants issued by the Company during each period presented was as follows.

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March 2021

 

Number

Number

Number

Outstanding at beginning of period

1,233,333

833,333

833,333

Granted during the period

1,097,226

400,000

400,000

Effect of share consolidation

-

-

-

Outstanding at end of period

2,330,559

1,233,333

1,233,333

 

At 30 September 2021 the exercise price of share options issued to key employees ranges between £0.0001 and £0.45 and their remaining contractual life was three years.

 

 

Notes to the interim accounts

 

14.  Share options and warrants, continued

 

Warrants

The movement on the number of warrants issued by the Company during each period presented was as follows.

 

Unaudited

Unaudited

Audited

 

Six months to

Six months to

Year ended

 

30 September 2021

30 September 2020

31 March 2021

 

Number

Number

Number

Outstanding at beginning of period

2,310,681

220,000

220,000

Granted during the period

126,760

1,308,400

2,090,681

Effect of share consolidation

-

-

-

Outstanding at end of period

2,437,441

1,528,400

2,310,681

 

At 30 September 2021 the exercise price of warrants ranges between £0.25 and £0.60 and their remaining contractual life was two years.

 

15.  Events after the end of the interim reporting period

Following the Company's re-registration as a public company on 29 September 2021 the Company commenced trading on AIM on 21 October 2021.  65,000,000 new ordinary shares of £0.01 each ("Ordinary Shares") were issued at 60p per share, raising new funds of £39 million. Fees incurred on the AIM admission process were, in aggregate, £3.1 million, resulting in net proceeds of £35.9 million.

 

In October 2021, the Company secured a US$28 million Senior Secured Loan Facility and a US$21 million Royalty sale, with Orion Resource Partners.

 

On 21 November 2021 the Company issued 242,222 new Ordinary Shares of £0.01 each at a total consideration of £71,000 as a consequence of the exercise of warrants as follows:

· 22,222 warrants were exercised at a price of £0.45 per share

· 120,000 warrants were exercised at a price of £0.30 per share, and

· 100,000 warrants were exercised at a price of £0.25 per share.

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